Bucholt: The case for divestment
The word "divestment" appears frequently in the news, often in the context of climate change. I'd like to explain what divestment means and make a case for why it's important.
To "divest" is to get rid of something. The current global divestment movement is trying to convince universities, hospitals, governments, and churches to eliminate fossil fuel stocks from their endowment portfolios and (state government) pension plan funds.
Why should a school, or an individual, sell off their fossil fuel stocks?
Reason 1: To make a public statement and take a moral stand: that they no longer want to be associated with an industry that habitually lies to the public and which puts short-term profits above the long-term health of our planet and the people who live on it. (Case in point: EXXON's own scientists knew in 1987 that burning oil would result in global warming, but the executives not only failed to make that knowledge public, they began a systematic campaign to confuse the public as to the cause of global warming.)
Reason 2: It is financially responsible to sell off fossil fuel stocks now because they will plummet in value as the world transitions to cheaper and cleaner renewable energy sources, and as electric cars replace vehicles with internal combustion engines. (Case in point: Xcel supplies electricity to people in 10 states in the middle of the US; they announced earlier this year that in the near future the electricity they supply to their customers will come 100 percent from renewables because it is cheaper than buying from existing coal and gas plants.)
The major oil companies' monetary worth is predicated on extracting all of their known oil reserves. However, if you do the math (as Bill McKibben did), you discover that to burn that amount of fossil fuel would result in the warming of the planet by 6 degrees Celsius - four times as much as scientists tell us is safe to sustain life as we know it on Earth. Logic dictates that we simply can not extract and burn all the oil and gas reserves that are carried on the books as Assets. When those reserves become "stranded assets", there will be a rapid decline in the value of fossil fuel stocks.
Reason 3: Selling off fossil fuel stocks frees up money to be re-invested in the green economy. Jobs in the renewable energy sector are growing much faster than the fossil fuel sector and many of those jobs pay better and reinvigorate the local economy, as opposed to the profits leaving the region/state.
Reason 4: Divestment works to erode the enormous political power that the fossil fuel industry has on Congress and state governments. The oil, gas, and coal industries donate millions of dollars in campaign contributions and assault Congress critters with hoards of lobbyists, thereby ensuring favorable legislation. (Case in point: We have no idea what chemicals are poisoning our land and water through fracking because the industry got Congress to grant them an exemption from reporting that information. Also, we the people are subsidizing the fossil fuel industry by giving them billions of dollars in tax breaks and by granting leases to our public lands at well-below market value.)
Ask your financial advisor or portfolio manager how you can join governments, universities and individuals all around the world who have divested from fossil fuel stocks. It's easy, you'll feel good about helping the planet and your grandchildren, and your stock portfolio will ultimately be safer and more profitable.
Carl Bucholt of Manchester is a member of Transition Town Manchester and Earth Matters, two local environmental groups dedicated to fostering resilience, weaning ourselves off fossil fuels and pesticides, and improving the quality of life for all of Earth's inhabitants.
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